Marks Electrical Share Discussion Threads

[markatkinson] 21/4/2023 07:16

Released this morning is an episode of Jeremy McKeown's 'In The Company of Mavericks' podcast where I had the pleasure of co-hosting a discussion with Marks Electrical CEO Mark Smithson. It was great to hear Mark's story and his plans for the future -

hxxps://inthecompanyofmavericks.com/episodes

[darrin1471] 12/4/2023 14:24

Growth is very good.
4 months +13.1%
H1 +15.1%
Q3 +33.4%
9 months +22%
Q4 +20%
FY + 21.5%

[kalai1] 12/4/2023 14:00

Marks Electrical Group plc issued a FY 23 trading update for the 12 months ended 31 March 2023 this morning. The Group posted record full year revenue of £97.8m, up 21.5%, adjusted EBITDA is expected to exceed £7.5m. The Group saw particularly strong trading in Q4-23 with 20.0% revenue growth to £24.8m. The performance extends the Group’s trajectory of robust and profitable growth. The balance sheet remains solid with a closing net cash position of £10.0m. Valuation is reasonable with forward PE ratio around 15x, PS ratio around 1x. The share price even has some decent near-term momentum having rallied solidly off Q4 2022 lows. The weak UK macro-economic environment is the main potential cloud to business and share price performance. The rest of the investment case looks attractive and points to a solid BUY...

...from WealthOracle

[darrin1471] 12/4/2023 11:49

Revenue at highest estimate.
EBITDA above estimates
Net cash £10m (£4m above estimates)

[darrin1471] 12/4/2023 08:04

Excellent FY23 update.

[edmonda] 12/4/2023 07:54

New research report here (free & accessible):

A better than-expected 21.5% increase in sales revenue to £97.8m, higher EBITDA margins and strong cash conversion were the key features of today’s Marks Electrical Group (MRK) FY2023 trading update. In addition, a positive start to April augurs well for FY2024, a year in which we expect to see further market share gains and expansion of the product and service offering.

The central investment case for the shares remains firmly in place, in our view. The company is well invested to meet demand growth in its business operationally as well as enjoying significant scope to generate this demand growth through increased brand awareness. Furthermore, market share is comparatively small at around 3% despite three consecutive years of exponential progress in sales.

With a trailing EV/sales ratio of only 0.8x we continue to argue that the shares appear undervalued and reiterate our fair value of 150p for the shares.

[darrin1471] 15/2/2023 11:08

Mark Smithson * 77,278,181. 73.6%
Canaccord Genuity Limited. 5,750,000. 5.5%
Stancroft Trust Limited. 5,454,545. 5.2%
Octopus Investments Limited. 4,090,909. 3.9%
Total 88.2%

That only leaves £10m of shares for everyone else. To little liquidity for an institutional to add or sell.

Results were on track. Good but what they predicted.
If buying for the long term, then reassuring.
Someone taking a shorter term approach may have seen a 75% rise in 3 months and decided to take some profits.
Today MRK are down 17% in a month so a buyer may decide to wait to see if the trend continues and somebody sitting on a profit may want to bank the profit.
Personally I thought MKS were good long term value at at 90p in June but I was not going to buy while the price was falling. Ended up buying between 70p & 80p then selling half at 96p. I'm keeping the balance long term and will add on any further weakness.

[montymonster] 14/2/2023 23:39

Something strange is happening here since the excellent results update at the beginning of January. Any info or theories?

[darrin1471] 02/2/2023 14:12

Competition making Marks offer look even better.

Currys boss Alex Baldock says: “We’re leading more boldly on price rises, and we’re charging for services more now as well.”
The retailer has recently introduced delivery charges on major appliances and TVs.
He adds: “We’re doing fewer promotions – the promotional intensity significantly declined – and we’re especially doing none of the less profitable ones.”

[darrin1471] 14/1/2023 12:05

Interview with Mark Smithson. Shows you the type of man you are investing in

[darrin1471] 11/1/2023 12:09

Marks Electrical (LON: MRK) continues to outperform its electrical retail rivals and is taking market share. The share price has been on an upward trajectory since last October.

Revenues in the third quarter to December 2022 were one-third ahead at £29.8m and margins are improving. More customers are taking advantage of the installation service offered by the company. Nine-month revenues are 22% higher at £72.9m. The interim growth rate was 15%.

Profit is still likely to be lower this year and earnings certainly will because of the additional shares in issue after the 2021 flotation. Marks Electrical raised £5m at 110p a share when it joined AIM in November 2021. However, Marks Electrical has been able to maintain a good level of profitability even in tougher times.

Full year pre-tax profit is expected to decline from £6.44m to £5.67m, but the strength of the third quarter revenues means that there I a chance that this figure could be beaten. A pre-tax profit of £8m is expected next year.

Although inventories levels are higher, net cash is forecast to improve to £3.87m by the end of March 2023. A full year dividend of 0.67p a share is forecast.

[darrin1471] 11/1/2023 12:05

Not expecting this to be a strong dividend growing share. Strong sales, growth, profits and cash but they appear to want to build a cash pile to build a bigger distribution centre. Marks appears to be able to have a flexibility on marketing expenditure which can maintain margins. More sales gives more to spend on marketing which they think will lead to stronger and quicker growth.

[edmonda] 10/1/2023 07:30

Trading Update (new research report and audio summary available here:

Rapid 33.4% revenue growth, margin expansion relative to the first half, and a record level of delivery volumes were the main features of Marks Electrical’s FY2023 Q3 trading update. Furthermore, the strength of Q3 business lends significant credibility to the company’s view that it is on track to achieve its full year targets, and bolsters confidence in our fair value for Marks Electrical Group of 150p per share based on relative valuation and DCF.

Marks Electrical’s strong 33.4% growth in FY2023 Q3 implies a 22.0% 9-month growth to 31 December 2022 and acceleration from 15.1% growth in the first six months. The company advanced sales in the important Q3 trading period, which in FY2022 was equivalent to 28% of annual sales revenue. The strength of Q3 sales growth should also have increased operating leverage and thus driven margin expansion. We note that with 82% of our FY2023 target already achieved, the company is in a strong position to meet current expectations for sales revenue and profitability.

Cash conversion remains an important part of the Marks Electrical investment case, which should have benefited in Q3 from maintenance of inventory levels during the peak trading period and an implied improvement in the inventory:sales ratio. A strong cash position augurs positively for dividend paying capability. A 0.3p interim dividend was paid to shareholders on 23 December 2022.

Marks Electrical’s in-house delivery vehicle fleet achieved record quarterly sales volumes in Q3. Service levels and customer satisfaction should benefit going forward from the company’s in-house installation service. Over 3,000 installations have been completed since the offering’s launch last August.

[darrin1471] 09/1/2023 17:35

Trading update tomorrow.

[darrin1471] 04/1/2023 09:36

10 JANUARY 2023 TRADING UPDATE

[brummy_git] 08/11/2022 08:08

Commentary & CEO/CFO interview here

www.linkedin.com/posts/paul-hill-a5994116_video-qa-with-marks-electrical-ceo-mark-activity-6995653688170004480-nGz9?utm_source=share&utm_medium=member_desktop

www.linkedin.com/posts/paul-hill-a5994116_mrk-mrk-activity-6995641739562614784-0ORL?utm_source=share&utm_medium=member_desktop

[edmonda] 08/11/2022 07:25

Connecting the growth drivers - new research report - full link here:

Marks Electrical’s 15.1% first half sales growth was announced in last month's trading update, driven by market share gains. Today’s interim results release evaluates those share gains in more detail, as well as including three important indicators of ongoing and sustainable progress within the business – margin resilience, a strong return profile and the company’s net cash position. The company is well placed to make further share gains in H2. Despite a competitive market, the company continued to invest in its brand and customer service levels. Moreover, MRK expects to meet current market expectations of profit growth for the full year.

The company’s intrinsic value incorporates its industry-leading 4.8 Trustpilot score and significant headroom in terms of both market share and brand awareness levels. A positive cash position was reflected in the announcement of a 0.30p interim dividend. We maintain our fair value of 150p per share.

[debsdowner] 11/10/2022 10:01

Impressive but consumer spend is going to collapse soon Barclaycard says 9 out of 10 people worried about rising bills.

Good luck holders will need it !

[jolomo] 11/10/2022 09:20

edmonda,

Appreciate the additional info that Equity Development offers but I think a little more honesty in presentation is needed. Forecasts have been cut & quoting frankly silly valuation metrics doed not engender trust.

[edmonda] 11/10/2022 08:03

Market share gains drive strong sales growth in H1 - link to full new research report here:

Continued and sizeable market share gains drove a 15.1% increase in first half sales for Marks Electrical Group (MRK), particularly impressive in a market that was contracting overall. The company made gains in both Major Domestic Appliances (MDAs) and Consumer Electronics (CE), despite both categories being weak for online business in the period. Moreover, the MRK cash position remains strong, outperforming expectations.

These inherent business qualities are not captured in the current share price, in our view, and we reiterate a 150p fair value. MRK is not only comfortably delivering double-digit sales growth but also enjoys significant geographic and category headroom for further expansion. In addition, it operates on a cash positive basis which implies scope for incremental dividend growth as earnings advance. We base our fair value on 1.7x FY2023 sales revenue and 21.5x FY2023 EV/EBITDA.